Communications and Technology

States Grapple with AI Regulation Amid Rapid Innovation

How regulatory crusades against AI could stifle innovation, hinder economic growth, and leave the states behind in the tech revolution.

Arlington, VA – Artificial intelligence has become a legislative hot topic, with nearly every state filing bills in last year to regulate its development and use. According to Jake Morabito, Senior Director of the Communications and Technology Task Force at the American Legislative Exchange Council (ALEC), the volume of AI-related bills was unprecedented.

“There were almost 700 unique state bills alone trying to regulate artificial intelligence in some fashion,” Morabito explained. “That’s not even counting the over 100 bills filed at the federal level and what’s happening globally. In fact, 45 states filed bills, with only those without a legislative session in 2024 sitting out.”

The explosion of legislative interest is largely attributed to AI’s rapid technological advancements. Nearly two years into the introduction of ChatGPT, which turned AI from a buzzword into a tangible reality for everyday users, it has the ability to influence each and every industry.

While Morabito is optimistic about AI’s potential, he acknowledged concerns about its misuse.

“There are fears about illegal activity or bad actors abusing the technology,” he said.

That being said, anyone worrying about a Skynet situation should take a breath before adopting a worse case scenario.

“Don’t use science fiction movies as your inspiration. Terminator didn’t happen—it’s a compelling movie, but not a basis for public policy.”

Balancing Innovation with Oversight

Some states, particularly California, New York, and Illinois, are advancing restrictive legislation, which Morabito warned could stifle innovation.

“What’s being threatened is a patchwork of state-by-state regulations,” he explained. “Many of these laws are not addressing bad conduct but are instead broadly defining AI in ways that could sweep up all kinds of technology, even basic software using algorithms.”

A notable case is Colorado, where a law regulating algorithmic decisions was signed despite its flaws. Which, of course, raises the question as to why a government (or governor) would adopt a piece of legislation that was not up to par. Yes, there is the argument that perfect should never be the enemy of the good, but obvious deficits should be addressed before it goes to the governor’s desk.

On the other hand, Morabito highlighted Utah’s approach as a model for informed policymaking.

“Utah created an advisory body within the legislature to study AI and provide recommendations. Their first case study looked at mental health and AI, bringing in psychologists and industry experts to offer a full picture. This approach encourages innovation while ensuring responsible development.”

Protecting Kids Online

Another major legislative focus in 2024 was online safety for children, particularly concerning social media.

“Nearly a dozen states passed laws requiring mandatory age verification for social media platforms,” Morabito explained. “But this raises privacy concerns. Parents might have to upload sensitive documents like birth certificates or passports for their kids, and companies are wary of being custodians of such data.”

ALEC advocates for empowering parents instead of imposing blanket regulations. After all, it’s the parents who understand their children’s needs better than any state official. With tools like screen time restrictions, content filters, and privacy settings, parents are well-equipped to be far more effective than intrusive state mandates.

Technology in Schools

The debate over technology also extends to classrooms, where states and districts are reevaluating policies on personal devices. Morabito pointed to ‘bell-to-bell bans’ on cell phones and other devices in the classroom. Other examples include allowing access to devices during lunch or non-classroom time. Each community attempting to address the needs of their specific school systems.

Despite concerns about distractions, Morabito emphasized the benefits of educational technology.

“Tools like Khan Academy have transformed learning by making resources accessible to all types of students,” he said. “We shouldn’t lose sight of the positive role technology plays in education.”

As states navigate these complex issues, Morabito urged lawmakers to prioritize informed, balanced policies.

“Whether it’s AI or online safety, we need to avoid rushed legislation and focus on solutions that foster innovation while protecting consumers and families.”

Innovation and progress are the cornerstones of economic growth, but heavy-handed regulations on emerging technologies risk stifling these drivers of prosperity. Policies that deter investment, slow job creation, and suppress technological advancements ultimately harm both businesses and consumers. To remain competitive in a rapidly evolving global landscape, policymakers must prioritize frameworks that encourage innovation, embrace flexibility, and foster a thriving ecosystem for emerging technologies. The future of economic vitality depends on the ability to adapt, compete, and lead in the next wave of technological transformation.